During this year, studies were completed in several areas. Biological activity of stem cells Based on our extensive knowledge of how to induce BMSCs to form bone by in vitro expansion and in vivo transplantation, we developed techniques for generation of bone by human embryonic stem cells (hESCs). Cells of the HSF-6 line were cultured in differentiating conditions in vitro for prolonged periods of time ranging from 7 to 14.5 weeks, followed by in vivo transplantation into immunocompromised mice in conjunction with hydroxyapatite/tricalcium phosphate (HA/TCP) ceramic powder. Twelve different medium compositions were tested, along with a number of other variables in culture parameters. In differentiating conditions, HSF-6-derived cells demonstrated an array of diverse phenotypes reminiscent of multiple tissues, but after a few passages, acquired a more uniform, fibroblast-like morphology. Eight to 16 weeks post-transplantation, a group of transplants revealed the formation of histologically proven bone of human origin, including broad areas of multiple intertwining trabeculae, which represents the most extensive in vivo bone formation by the hESC-derived cells described to date. KO-DMEM-based media with FBS, dexamethasone, and ascorbate promoted more frequent bone formation, while media based on alpha MEM promoted teratoma formation in 12- to 20-week-old transplants. Transcription levels of pluripotency-related (Oct4, Nanog), osteogenesis-related (collagen type I, Runx2, ALP, BSP) and chondrogenesis-related (collagen types II and X, aggrecan) genes were not predictive of either bone or teratoma formation. The most extensive bone was formed by the strains that, following four passages in monolayer conditions, were cultured for 23 to 25 extra days on the surface of HA/TCP particles, suggesting that co-culturing of hESC-derived cells with osteoconductive material may increase their osteogenic potential. While none of the conditions tested in this study, and elsewhere, ensured consistent bone formation by hESC-derived cells, our results may elucidate further directions towards the construction of bone with hESCs, or in the future, from an individual's own iPS cells. BMSCs/SSCs in disease We have had a long-term interest in the somatic mosaic disease, fibrous dysplasia of bone (FD), caused by activating missense mutations of the GNAS gene that codes for the G protein, Gs-alpha. While many of our previous studies have relied on the use of BMSCs derived from FD tissue, procurement of sufficient amounts of tissue and the degree of somatic mosaicism within the resulting cell populations precludes in depth analysis requiring large numbers of cells. For these reasons, normal human BMSCs were engineered to produce mutated Gs alpha using lentiviral vectors. These cells displayed characteristics similar to FD-derived BMSCs including increased levels of cAMP, abnormal expression patterns of bone matrix proteins and proteins that regulate osteoclast formation, a reduced osteogenic capacity, and an inability to differentiate into adipogenic cells in vitro. Upon in vivo transplantation into immunocompromised mice in conjunction with HA/TCP particles, an FD-like ossicle was formed characterized by poorly organized woven bone and a lack of hematopoietic marrow. Interestingly, transduced mutated BMSCs exhibited an increase in phosphodiesterase activity, which cleaves cAMP, suggesting a mechanism by which cells cope with prolonged elevated levels of cAMP. In addition, by using RNA interference, it was found that the mutated Gs alpha allele could be selectively inhibited, suggesting a potential future therapeutic approach. cAMP-mediated signaling primarily initiates with binding to PKA-I, composed of two regulatory subunits, R1a, and two catalytic subunits, Calpha. Binding of cAMP causes dissociation of the complex, thereby liberating Calpha subunits to phosphorylate proteins down stream in the pathway, some of which then migrate to the nucleus to regulate gene expression. Due to the fact that PKA-I is down stream of Gs alpha in cAMP-mediated signaling in BMSCs/SSCs, bones from mice deficient in PKA-I subunits were examined. Unexpectedly, mice heterozygous for a null allele of R1a were found to develop bone lesions that resemble fibrous dysplasia (FD). These mice were then crossed with mice that were heterozygous for Calpha to further abrogate PKA-I signaling. Even more unexpectedly, these doubly heterozygous mice developed a greater number of FD-like lesions, as well as occasional chondromas and sarcomas in older animals. Interestingly, cells from these lesions had elevated PKA-II activity, resulting from increased expression of alternate R and C isoforms. These studies indicate that elevation of PKA-II signaling causes a malfunction in BMSCs/SSCs similar to what is observed in FD (although not identical), and suggest that in FD, constitutive activation of Gs alpha in BMSCs/SSCs may interfere, by mechanisms not yet known, in the expression of PKA-I subunits, leading to increased signaling through PKA-II. In addition to fibrous dysplasia of bone, we have collaborated with as number of investigators on the characterization of other mineral and skeletal disorders, including dystrophic calcification associated with the idiopathic inflammatory myopathies. We determined the microstructure, chemical composition, mineral density and stiffness of calcium deposits obtained from patients. The apatite was much more crystallized than bone and dentin, and closer to enamel, as was the mineral density and stiffness. Large mineralized areas were typically devoid of collagen;however, collagen was noted in some regions within the mineral or margins. It appears that the mineral is deposited first in a fragmented pattern followed by a wave of mineralization that incorporates these particles. BMSCs/SSCs in tissue engineering and regenerative medicine We have initiated studies to determine how BMSCs can be used clinically for non-orthopaedic injuries and diseases. Instead of direct orthotopic transplantation, BMSCs have been infused into the circulation. It is currently thought that while BMSCs do not transdifferentiate into cell types outside of their normal lineage, but that they exert beneficial effects in a variety of injuries and diseases due to their expression of high levels of growth factors and cytokines that encourage tissue regeneration by endogenous stem/progenitor cells. However, methods of determining where infused cells are distributed in human patients are not yet well developed. Superparamagnetic iron oxide nanoparticles (SPION) are increasingly used to label BMSCs to monitor their fate by in vivo MRI, and by histology after Prussian blue (PB) staining in animal model systems. SPION-labeling appears to be safe as assessed by in vitro differentiation of human BMSCs, however, we chose to resolve the question of the effect of labeling on maintaining the "stemness" of cells within the human BMSC population in vivo. Assays performed included colony forming efficiency, CD146 expression, gene expression profiling, and the "gold standard" of evaluating bone and myelosupportive stroma formation in vivo in immunocompromised recipients. SPION-labeling did not alter any of these assays. Comparable abundant bone with adjoining host hematopoietic cells were seen in cohorts of mice that were implanted with SPION-labeled or unlabeled human BMSCs. PB+ adipocytes were noted, demonstrating their donor origin, as well as PB+ pericytes, indicative of self-renewal of the stem cell in the human BMSC population. This study confirms that SPION labeling does not alter the differentiation potential of the subset of stem cells within BMSCs, and suggests that this method can be safely used to track labeled BMSCs after infusion into human patients.